Monday, March 7, 2011

The Dangote Foundation--a charitable group created by one of Nigeria's most successful entrepreneurs--has joined with Nigeria's Bank of Industry to create a 5 billion naira ($32 million) fund to invest in the informal economy, Worldstage magazine reports. The money would be used to bolster working capital so entrepreneurial outfits can grow and would be loaned out to informal businesses at 5 percent interest.

Aliko Dangote, whose various businesses include cement, food, beverages, and real estate, said the fund would grow to 20 billion naira--or better than $100 million US--and could spur the creation of as many as a million jobs.

Nigeria has more than 150 million people and it would be easy to dismiss $32 million as a minuscule investment. But it is also an important first step. In establishing the fund, the government and the private sector are implicitly acknowledging the strength of the sub-rosa economic sphere and its importance for Nigeria's future.

Anil Gupta, a professor at the Indian Institute of Management, is calling on students to study the creativity of informal businesses.His idea is that, in a work-study intiative called the shodhyatra, students should spend their time with small-scale fabricators, weavers, leather workers, chemical formulators or garment manufacturers--visiting and learning from these businesses that most business schools don't recognize as legitimate.

If hundreds of thousands of students every summer go out into the hinterland, industrial clusters and villages, there is no way the mindset which promotes inertia, mediocrity and inefficiency can survive in India. The time to connect has come. Creativity, collaboration and compassion will follow.

Tuesday, March 1, 2011

A super-brief item in the Buenos Aires Herald notes that, in January, wages in Argentina's informal economy rose at a much steeper rate than wages in the formal sector--a 4.1 percent boost vs. a 1.6 percent increase. But what does this mean? Are System D wages incredibly skimpy? Or is the informal economy so robust that it has no problem supporting such a strong rise in salaries?

Street hawkers who sell food and other goods at a taxi rank in Rustenburg, South Africa are protesting the demolition of their stalls by the local ANC government, iolnews reports. Local officials told the merchants they could demonstrate at a major ANC meeting in the city stadium, but the memo apparently didn't reach police, who blocked the hawkers when they tried to congregate.

The street traders vented their frustration in placards they mounted on their hastily rebuilt stalls. "We are totally angry," read one placard. Said another, "We are tired."

As one merchant told the news service, they are simply trying to put food on their tables. "You cannot postpone hunger... We are trying to make a living."

About Me

I spent most of the past four years hanging out with street hawkers, smugglers, and sub-rosa import/export firms to write Stealth of Nations, a book that chronicles the global growth of System D--the parallel economic arena that today accounts for half the jobs on the planet.
Prior to that, I lived in squatter communities across four continents to write Shadow Cities, a book that attempts to humanize these vibrant, energetic, and horribly misunderstood communities.
My articles on cities, politics, and economic issues have appeared in many publications, including Harper's, Scientific American, Forbes, Fortune, The Nation, The New York Times, The Washington Post, Metropolis, and City Limits. Before becoming a reporter, I worked as a community organizer and studied philosophy. I live in New York City and do most of my writing on manual typewriters.